Program

COVID-19 Federal Assistance e311

Topics

Compliance & Reporting, Fund Planning & Allocation, Procurements

Funding Source

American Rescue Plan Act

Are applicants required to competitively bid ARPA award funding? What are the pass-through responsibilities for subrecipients under Treasury’s Uniform Guidance for competitive procurement?

Treasury does not require that an applicant competitively bid ARPA funding that the applicant intends to provide to a subrecipient.

When applying for APRA funding, an applicant fills out an application form and indicates the applicant’s program goals and objectives in response to a Notice of Funding Opportunity (NOFO) published by the federal awarding agency. If the applicant intends to provide ARPA funding to subrecipients, the applicant can create an application form for subrecipients to submit proposals. This subrecipient application form generally includes program requirements and information set forth in the awarding agency’s guidance.

Pass-through entities are non-federal entities that provide a subaward to a subrecipient to carry out part of a federal program.[1]  Subrecipients are the non-federal entities that receive a subaward from a pass-through entity to carry out part of a federal program; but do not include individuals that are beneficiaries of such a program.[2] A subrecipient may also be a recipient of other federal awards directly from a federal awarding agency.[3] Contractors are entities that receive a contract as set forth under 2 CFR 200.22.[4]

Treasury’s Uniform Guidance does not require that a subrecipient award be subject to a competitive bidding process. Conversely, Treasury’s Uniform Guidance does require that contractor awards be subject to competitive procurement. Uniform Guidance provides definitions for both subrecipient and contractor relationships.[5]

If a pass-through entity is providing ARPA funding to a subrecipient, the pass-through entity must ensure compliance with 2 CFR 200.332, including but not limited to the following:[6]

  • Ensuring every subaward is clearly identified to the subrecipient as a subaward and including the provisional requirements laid out in 2 CFR 200.332 (1)(i)-(xiv) (i.e., federal award identification number, federal award date, federal project description, indirect cost rate, among others).
  • Pass-through imposed subrecipient requirements must ensure the federal award is used according to the federal statutes, regulations, and terms and conditions of the federal award.
  • Identifying any additional requirements imposed on the subrecipient to ensure the pass-through entity meets its responsibility to the federal awarding agency.
  • Identifying any cost rate approved between the subrecipient and the federal government; if none exists, collaborating with the subrecipient to establish an appropriate rate, or use of the de minimis cost rate.
  • Conducting a risk assessment of the subrecipient to evaluate the subrecipient’s risk of non-compliance (i.e., evaluating prior audits, prior grant experience etc.).
  • Requiring the subrecipient to permit the pass-through entities and auditors’ access to the subrecipients records and financial statements.
  • Monitoring the subrecipients’ activities to ensure the subaward is used for authorized purposes and complies with Uniform Guidance, and all other relevant guidance issued by the federal awarding agency (i.e., reviewing financial and performance reports, verifying subrecipient single audit compliance, taking enforcement action for non-compliance etc.).
  • Ensuring closeout procedures are in place.[7]

Last Updated: December 6, 2022

[1] eCFR, Code of Federal Regulations, 2 CFR 200.74, available at: eCFR :: 2 CFR 200.74 (2017-01-03) -- Pass-through entity.

[2] eCFR, Code of Federal Regulations, 2 CFR 200.93, available at: eCFR :: 2 CFR 200.93 (2017-01-03) -- Subrecipient.

[3] Id.

[4] eCFR, Code of Federal Regulations, 2 CFR 200.23, available at: eCFR :: 2 CFR 200.23 (2017-01-03) -- Contractor.

[5] eCFR, Code of Federal Regulations, 2 CFR 200.331, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, available at: eCFR :: 2 CFR 200.331 (2013-12-26)

[6] This is a very high-level synopsis of 2 CFR 200.332, and the entirety of the regulation should be reviewed.

[7] eCFR, Code of Federal Regulations, 2 CFR 200.332, Subrecipient Monitoring and Management: Requirements for Pass-Though Entities, available at: eCFR :: 2 CFR 200.332 (2020-08-13).